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Cape Air hopes fare cuts give Lebanon airport an FAA jackpot

LEBANON — Lebanon Municipal Airport's only commercial airline, Cape Air, is reducing fare prices with the goal of reaching 10,000 passengers before the end of 2013.

It's a maneuver Cape Air employed last year to hit 10,000 passengers and qualify the small airport for about $1 million in Federal Aviation Administration airport improvement funds. Airports with fewer than 10,000 "enplanements" — or passengers leaving the airport — qualify for only $150,000 in FAA funds.

Cape Air is federally subsidized through the FAA's Essential Air Service program, but the 10,000 mark doesn't impact the small airline's status, Cape Air managing director of marketing and public relations Trish Lorino said. The reduction of rates — $49 to Boston each way and $99 to New York each way — is simply to help the airport, she said. Last year Cape Air reduced fare to $12 the last two weeks of the year.

Sen. Kelly Ayotte, who opposed the reduced fares last year, said in a statement, "Taxpayers are effectively subsidizing this promotion, given that Lebanon Airport relies heavily on millions in taxpayer subsidies each year made possible through the so-called 'Essential Air Service' program. This may seem like a bargain for air travelers, but taxpayers are the ones left holding the bag at the curb. If the airline can afford to slash prices on plane tickets, it would certainly seem that the federal subsidy has outlived its original purpose.

"I certainly appreciate Lebanon Airport, but with our country over $17 trillion in debt, every federal program must be evaluated based on its merits."

According to Ayotte's office, the non-partisan Congressional Budget Office has found that $1.2 billion could be saved by eliminating EAS.

In 2011, Ayotte supported an effort to eliminate the Essential Air Service program. According to U.S. Senate voting records Sen. Jean Shaheen also voted against continued EAS subsidy in the 2011 vote.

According to the U.S. Department of Transportation's October 2012 report, Cape Air provides air service at Lebanon Airport at an annual federal EAS subsidy rate of $2.35 million, for flights on a nine-seat Cessna-402 aircraft from Lebanon to Boston or Westchester County Airport in White Plains, NY.

The annual subsidy rate provides for service consisting of four non-stop round trips per day to Boston and two non-stop round trips per day to Westchester County. The subsidy provides up to $46,536 a week or $554 per eligible arrival or departure.

Lebanon airport manager Rick Dyment said the reduced fares to reach the 10,000 enplanement goal don't affect Cape Air's EAS status, but help the airport pay for projects such as paving runways or clearing trees. Dyment said the FAA airport improvement funds are paid for with user fees, as is the EAS program.

Airport projects are typically funded 90 percent through FAA grants, 5 percent through the state Department of Transportation and 5 percent through airport passenger fees.

The airport needs 1,640 enplanements to reach its goal of 10,000, which Dyment said is "doable."